It kills insects and microorganisms (just like it kills almost anything else). So the net effect would be preservative, and it’s still used as such in a few obscure contexts despite its toxicity—the American FDA allows very small quantities as a preservative in eye makeup, for instance.

Given the mess on the floor of that one room, there may have been a considerable amount of cinnabar (mercury sulfide) pigment present. And liquid mercury was widely used in Chinese alchemy. Plenty of possibly routes for contact, either accidental or intentional.